Sears Canada posts loss as demand dips for home products

Wed May 22, 2013 8:37am EDT
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(Reuters) - Department store chain Sears Canada Inc (SCC.TO: Quote) posted a loss in the first quarter compared with a profit last year, as demand for its home products and major appliances fell.

Sears Canada, 51 percent owned by U.S.-based Sears Holdings Corp (SHLD.O: Quote), has been facing increasing competition as U.S. retailers such as Wal-Mart Stores Inc (WMT.N: Quote) expand their Canadian operations and new ones like Target Corp (TGT.N: Quote) enter the country.

Target opened its first Canadian stores in March and plans to have more than 100 by the end of this year.

Sears Canada, which operates 181 company-owned stores, reported a net loss of C$31.2 million ($30.3 million), or 31 Canadian cents per share, compared with a net profit of C$93.1 million, or 91 Canadian cents per share, a year earlier.

Last year's results included a pre-tax gain of C$164.3 million on lease terminations.

Factoring out these gains, the company said its results showed an overall improvement compared with the first quarter last year.

Revenue fell more than 6 percent to C$867.1 million. Sales at established stores, a key measure for retailers, fell 2.6 percent.

The company also said on Wednesday that interim Chief Financial Officer E.J. (Ephraim) Bird will take over the role on a permanent basis.

Bird was appointed interim CFO in March, two months after Sharon Driscoll resigned from the post.   Continued...

People walk past the main Sears store in downtown Vancouver, British Columbia February 23, 2011. REUTERS/Andy Clark